Enerflex (TSX:EFX) - Share price, News & Analysis

Q: What is the Fair Price of EFX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

EFX (CA$6.07) is trading below our estimate of [[fair value]] (CA$49.95)

EFX fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	5/6
Past Performance	0/6
Financial Health	6/6
Dividends	1/6

EFX Stock Overview

Rewards

Trading at 87.8% below our estimate of its fair value

Earnings are forecast to grow 70.12% per year

Risk Analysis

No risks detected for EFX from our risk checks.

Enerflex Competitors

CES Energy Solutions

TSX:CEU

CA$595.3m

Total Energy Services

TSX:TOT

CA$316.2m

Shawcor

TSX:SCL

CA$402.6m

STEP Energy Services

TSX:STEP

CA$319.2m

Price History & Performance

Summary of all time highs, changes and price drops for Enerflex
Historical stock prices
Current Share Price	CA$6.07
52 Week High	CA$11.12
52 Week Low	CA$5.89
Beta	1.33
1 Month Change	-24.60%
3 Month Change	-24.88%
1 Year Change	-27.65%
3 Year Change	-64.25%
5 Year Change	-66.98%
Change since IPO	-52.02%

Recent News & Updates

Jun 17

Is Enerflex (TSE:EFX) A Risky Investment?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

May 10

Enerflex (TSE:EFX) Will Pay A Dividend Of CA$0.025

Enerflex Ltd. ( TSE:EFX ) has announced that it will pay a dividend of CA$0.025 per share on the 7th of July. The...

Shareholder Returns

	EFX	CA Energy Services	CA Market
7D	-3.0%	2.7%	-0.8%
1Y	-27.7%	5.3%	-5.0%

Return vs Industry: EFX underperformed the Canadian Energy Services industry which returned 5.3% over the past year.

Return vs Market: EFX underperformed the Canadian Market which returned -5% over the past year.

Price Volatility

Is EFX's price volatile compared to industry and market?
EFX volatility
EFX Average Weekly Movement	7.3%
Energy Services Industry Average Movement	8.3%
Market Average Movement	10.1%
10% most volatile stocks in CA Market	17.4%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: EFX is not significantly more volatile than the rest of Canadian stocks over the past 3 months, typically moving +/- 7% a week.

Volatility Over Time: EFX's weekly volatility (7%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1980	2,000	Marc Rossiter	https://www.enerflex.com

Enerflex Ltd. supplies natural gas compression, oil and gas processing, refrigeration systems, energy transition solutions, and electric power generation equipment to the oil and natural gas industry. The company provides custom and standard compression packages for reciprocating and screw compressor applications; and designs, engineers, manufactures, constructs, and installs modular natural gas processing equipment, refrigeration systems, and electric power solutions, as well as engages in re-engineering, re-configuration, and re-packaging of compressors for various field applications; and modular processing equipment and waste gas systems for natural gas facilities. It also offers after-market services, parts distribution, operations and maintenance solutions, equipment optimization and maintenance programs, manufacturer warranties, exchange components, long-term service agreements, and technical services.

Enerflex Fundamentals Summary

How do Enerflex's earnings and revenue compare to its market cap?
EFX fundamental statistics
Market Cap	CA$544.36m
Earnings (TTM)	-CA$21.83m
Revenue (TTM)	CA$1.08b

0.5x

P/S Ratio

-24.9x

P/E Ratio

Is EFX overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
EFX income statement (TTM)
Revenue	CA$1.08b
Cost of Revenue	CA$852.30m
Gross Profit	CA$227.72m
Other Expenses	CA$249.55m
Earnings	-CA$21.83m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.24
Gross Margin	21.08%
Net Profit Margin	-2.02%
Debt/Equity Ratio	25.3%

How did EFX perform over the long term?

See historical performance and comparison

Dividends

1.6%

Current Dividend Yield

-39%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is EFX undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for EFX?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for EFX. This is calculated by dividing EFX's market cap by their current preferred multiple.
What is EFX's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$544.36m

EFX key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	6.4x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does EFX's PS Ratio compare to its peers?

EFX PS Ratio vs Peers

The above table shows the PS ratio for EFX vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	0.5x
CEU CES Energy Solutions	0.4x	5.8%	CA$595.3m
TOT Total Energy Services	0.6x	15.2%	CA$316.2m
SCL Shawcor	0.4x	4.3%	CA$402.6m
STEP STEP Energy Services	0.5x	17.2%	CA$319.2m
EFX Enerflex	0.5x	30.9%	CA$544.4m

Forward PS

Price-To-Sales vs Peers: EFX is expensive based on its Price-To-Sales Ratio (0.5x) compared to the peer average (0.5x).

Price to Earnings Ratio vs Industry

How does EFX's PE Ratio compare vs other companies in the CA Energy Services Industry?

Price-To-Sales vs Industry: EFX is good value based on its Price-To-Sales Ratio (0.5x) compared to the Canadian Energy Services industry average (0.8x)

Price to Sales Ratio vs Fair Ratio

What is EFX's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

EFX PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	0.5x
Fair PS Ratio	1.2x

Price-To-Sales vs Fair Ratio: EFX is good value based on its Price-To-Sales Ratio (0.5x) compared to the estimated Fair Price-To-Sales Ratio (1.2x).

Share Price vs Fair Value

What is the Fair Price of EFX when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: EFX (CA$6.07) is trading below our estimate of fair value (CA$49.95)

Significantly Below Fair Value: EFX is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate EFX's PEG Ratio to determine if it is good value.

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Future Growth

How is Enerflex forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

70.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: EFX is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.6%).

Earnings vs Market: EFX is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: EFX is expected to become profitable in the next 3 years.

Revenue vs Market: EFX's revenue (30.9% per year) is forecast to grow faster than the Canadian market (6.5% per year).

High Growth Revenue: EFX's revenue (30.9% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: EFX's Return on Equity is forecast to be low in 3 years time (8.7%).

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Past Performance

How has Enerflex performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-4.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: EFX is currently unprofitable.

Growing Profit Margin: EFX is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: EFX is unprofitable, and losses have increased over the past 5 years at a rate of 4.7% per year.

Accelerating Growth: Unable to compare EFX's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: EFX is unprofitable, making it difficult to compare its past year earnings growth to the Energy Services industry (-8%).

Return on Equity

High ROE: EFX has a negative Return on Equity (-1.63%), as it is currently unprofitable.

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Financial Health

How is Enerflex's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: EFX's short term assets (CA$735.1M) exceed its short term liabilities (CA$395.8M).

Long Term Liabilities: EFX's short term assets (CA$735.1M) exceed its long term liabilities (CA$489.1M).

Debt to Equity History and Analysis

Debt Level: EFX's net debt to equity ratio (15.3%) is considered satisfactory.

Reducing Debt: EFX's debt to equity ratio has reduced from 33.7% to 25.3% over the past 5 years.

Debt Coverage: EFX's debt is well covered by operating cash flow (49.5%).

Interest Coverage: EFX's interest payments on its debt are well covered by EBIT (3.4x coverage).

Balance Sheet

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Dividend

What is Enerflex current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.65%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: EFX's dividend (1.65%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.02%).

High Dividend: EFX's dividend (1.65%) is low compared to the top 25% of dividend payers in the Canadian market (5.4%).

Stability and Growth of Payments

Stable Dividend: EFX's dividend payments have been volatile in the past 10 years.

Growing Dividend: EFX's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: EFX is paying a dividend but the company is unprofitable.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (7.5%), EFX's dividend payments are thoroughly covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.8yrs

Average management tenure

CEO

Marc Rossiter (50 yo)

3.17yrs

Tenure

CA$4,030,384

Compensation

Mr. Marc Edward Rossiter has been the President, Chief Executive Officer and Director at Enerflex Ltd. since May 03, 2019. He is responsible for the Enerflex’s value creation and global growth strategy.Mr...

CEO Compensation Analysis

Compensation vs Market: Marc's total compensation ($USD3.12M) is above average for companies of similar size in the Canadian market ($USD1.29M).

Compensation vs Earnings: Marc's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: EFX's management team is considered experienced (2.8 years average tenure).

Board Members

Experienced Board: EFX's board of directors are considered experienced (5.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/03 00:00
End of Day Share Price	2022/06/30 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31